This chapter explores in detail the OE/S process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.
Order Entry / Sales Process Activities:
Pre-Sales Activities
Sales Order Processing
Picking and Packing Goods
Shipping
Order Entry/Sales (OE/S) Process - reflects an interacting structure of people, equipment, methods, and controls that is designed to achieve certain goals. The primary function is to create information flows that support: (1) repetitive work routines of the sales order department, the credit department and the shipping department, and (2) decision needs of those who manage various sales and marketing functions. (p. 350)
Order Entry / Sales Process Information Flows:
1.Repetitive work routines of the sales order department, the credit department, and the shipping department (Horizontal) 2. Decision needs of those who manage various sales and marketing functions (Vertical)
Order Fulfillment Process: Process of creating value for the customer. Profit maximization while making goods available in a timely manner.
Horizontal Information Flows (9), please describe them: 1.) Customer places order
2.) Sales order department requests credit approval from the credit department.
3.) Credit department informs sales order department of disposition of credit request.
4.) Sales order department acknowledges order to the customer.
5.) Sales order department notifies shipping department of sales order.
6.) Sales order department notifies warehouse and B/AR/CR process of shipment
7.) Warehouse sends completed picking ticket to shipping.
8.) Shipping department informs sales order department of shipment.
9.) Shipping department informs carrier B/AR/CR process, and general ledger process of shipment.
Vertical Information Flows, explain: Decision needs of those who manage various sales and marketing functions. The vertical information flows (page 353 figure 10.2 in the book depicted by the broken lines) represent information flowing from the Supervisor of the sales order department (at the bottom of the hierarchy) to the manager of advertising, manager of new product development, manager of customer sales and service, manager of marketing intelligence, and manager of sales promotions (all in the middle of the hierarchy) with the VP of marketing atop the hierarchy. In other words, sales-related data is captured in the sales order department and then flows vertically to managers housed within the marketing organizational structure. This information was traditionally based on sales-related events and captured through the use of a sales order form or through the entry of data directly into the database. As organizations become increasingly more customer focused, the information needs for decision making are becoming less accounting entry-oriented and more focused on customer characteristics, needs, and preferences.
Technologies Supporting OE/S Process:
Data Warehousing: A collection of computerized data that is organized to most optimally support reporting and analysis activity. This can be a massive effort for a company.
"Store Data and from current and previous years often from both operational and management databases. A major use of data warehouses is in data mining, where the (often a very large amount of very diverse) data is processed to identify trends, patterns, and relationships. Sometimes, a limited scope data warehouse is called a data mart." (Becker)
Subject Oriented
Time Variant
Non-Volatile
Integrated
Evolution of Data Warehouses -Offline Copies of exisiting databases
- Offline Data Warehouse-update periodically
- Real Time Data Warehouse-updated as events are processed
-Integrated Data Warehouse-generates transactions back to "live" database.
Data Marts: Specialized version of a Data Warehouse. They are subsets of an overall warehouse and are customized for a special department. Predicated on a specific, predefined need for a certain grouping and configuration of select data. They are designed to provide detailed data for a specific set of users while avoiding the costly development and extensive time delays that come from the development of a data warehouse.
Data Mining: The Process of automatically searching large volumes of data for patterns, delivering new information.
Customer Relationship Management (CRM) Systems are designed to manage all the data related to customers, such as marketing, field service, and contact management data.
Automated Data Entry:
Bar Code Readers - devices that use light reflection to read differences in bar code patterns in order to identify a labeled item. (p. 370)
Optical Character Recognition - devices that use light reflection to read handwritten or printed characters (p.370) They have more difficulty than bar code readers in consistently reading data due to inconsistencies in writing characters, but they fulfill the need of barcodes when they aren't available.
Scanners - input device that captures printed images or documents and converts them into electronic digital signals that can be stored on computer media. (p. 370) They are key to increased use of electronic digital imaging to drive business processes and facilitate management decision making.
Digital Image Processing systems:
computer based systems developed to caputre, store, retreive, and present images of real or simulated objects.
Major Steps in a typical digital image processing system:
Input Stage-scanner are generally used to capture images or documents
Clerk uses a computer workstation to retrieve the image of a source document
After the document has been input additional processing such as-adding related data, incorporating retrieval and processing capabilities into the application, linking images in an enterpise system to make accessibility easier-might be added.
Narratives of the OE/S Process:
Write narratives for each of the models provided in chapter 10 starting with:
OE/S Data Stores
-Marketing Data
-Customer Master Data
-Sales Order Master Data
-Accounts Receiveable Master Data
- Inventory Master Data
OE/S Process Context Diagram-Customer places an order which goes through the Order entry/ sales process. The customer receives acknowledgement of the sales order. Then the carrier receives completed packing slip and a bill of lading. The billing accounts receivable/ cash receipts (BA/AR/CR) process receives the sales order notification and shipping's billing notification. Then the general ledger inventory sales is updated in the general ledger process.
OE/S Process Level-0 Diagram-
A customer places a sales order with a company. The company validates the sales order by checking inventory, customer, accounts receivable, and sales order master data. Once the computer processes this information, inventory and sales order master data are updated. Any valuable marketing information is also sent to the marketing data store. The sales order is completed by sending sales order notification to the billing/AR/cash receipts process, acknowledging the customer’s order, and sending a picking ticket to the warehouse. After the picking ticket is processed, a completed picking ticket is sent to the shipping department. Inventory and sales order data is retrieved from the master data table and compared with the picking ticket. Once this information is verified, the sales order and inventory master data tables are updated. Notification of the shipment is sent to the billing/AR/cash receipts process and a general ledger inventory sales update occurs. Finally, the bill of lading and packing slip are sent to the carrier to deliver the goods to the customer.
OE/S Process Level-1 (process 1) Diagram-
Customer places order where the availability of requested inventory is verified by consulting the inventory master data. If sufficient level of inventory is on hand to satisfy request, the order is forwarded for further processing. But, if the customer orders goods that are not in stock, a special back order routine will occur. Once the goods are received, the order is routinely processed. If the customer refuses to accept a back order, then the sales event is terminated and the order is rejected. Information from the order that has potential value to marketing would be recorded in the marketing data store.
Once inventory availability is assured, the customer's existence is verified by the customer master data store, and the customer's credit availability for the order is verified from the Accounts receivable master data store. If the customer exceeds their credit limit, their order is rejected (error routine not shown).
Once the order is accepted, simultaneously the following activities occur: the inventory master data updates to allocate the quantity ordered to the sales order, the sales order master data updates to indicate that a completed sales order has been created, and the sales order disseminates (the customer receives acknowledgment of order, sales order notification is sent and picking ticket is sent).
OE/S Process Level-1 (process 2) Diagram-
The warehouse personnel receive a picking ticket, locates the goods, the goods, take the goods off the shelf and match the goods with the picking ticket. If the goods from the shelf are might not be those indicated on the picking ticket, therefore there may be an error routine. If sufficient goods do not exist to satisfy the quantity requested, there will be an error routine. Warehouse personnel writes the quantities "picked" on the picking ticket, to indicate it is completed. And the completed picking ticket is forwarded to the shipping department.
OE/S Process Level-1 (process 3) Diagram-
The shipping department receives the completed picking ticket and data retrieved from the sales order master data table. The shipping clerk matches the quantity of goods, the quantity on the picking ticket, and the quantity stored in the sales order data store. If the details agree, the matched sales order is forwarded to the next process. If the details of data flow do not agree, the order is rejected and the initiates procedures for resolving any discrepancies.
Once the matched sales order is received, it produces and distributes notices of the shipment and updates the sales order and inventory master data tables. The sales order master data is updated to reflect that the goods have been picked, packed, and shipped. The inventory master data is updated to change the quantity allocated for the sales order to an actual shipment, thus reducing the quantity of inventory on hand. The distribution of notices includes the data flow of shipping's billing notification, the bill of lading, a packing slip is attached to the outside of the package and identifies the customer and the contents of the package, and the general ledger inventory sales update to notify the general ledger process that inventory has been sold and the cost of goods sold has increased.
OE/S System Flowchart:
A customer phones an order to the customer service center, where the CSR enters the sales orders into the computer. The system may prompt the CSR to enter the customer number, which retrieves certain standing data from the customer master data. The CSR enters the other data in the sales order guided by the cursor in the preformatted screen. The system automatically displays the description and price of each item ordered and the CSR enters the quantity ordered. After the customer’s credit is checked, the computer updates the enterprise database (sales order and inventory master data) and displays a sales order number, which is read to the customer. A picking ticket containing a bar code of the sales order number is printed in the warehouse. Warehouse personnel then pick the goods, record the quantity picked, and compare the goods to the picking ticket and initial ticket. The completed ticket (with bar codes) is sent to the shipping department, where the shipping personnel scan the bar code to bring the sales order information on the computer screen. They compare the order number and quantities and then accept the shipment. This prompts the computer to update the enterprise database (sales order, inventory, and GL master data), print a packing slip and bill of lading, and display “shipment accepted”. The goods are packed along with the packing slip and bill of lading, and the box is given to the carrier for delivery.
Describe the data structures from the ERD model provided in chapter 10:
A simplified concept of Horizontal and Vertical Integrations:
Horizontal or "within" information flows. A decision/order may interact with many people on the same level. However, Vertical Information will become less detailed and concentrate more on strategy as it moves up higher within the company. For Example, higher up information may concentrate on how do we improve the speed of fulfilling orders, how do we sell a higher percentage of a particular product, how do we save costs on a paticular material. A more detailed description of Horizontal and Vertical Sales Process taken from the book is mentioned above. This is ment for a simple understanding of Vertical and Horizontal concept within companies.
The Order Entry / Sales (OE/S) Process:
This chapter explores in detail the OE/S process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.Order Entry / Sales Process Activities:
- Pre-Sales Activities
- Sales Order Processing
- Picking and Packing Goods
- Shipping
Order Entry/Sales (OE/S) Process - reflects an interacting structure of people, equipment, methods, and controls that is designed to achieve certain goals. The primary function is to create information flows that support: (1) repetitive work routines of the sales order department, the credit department and the shipping department, and (2) decision needs of those who manage various sales and marketing functions. (p. 350)Order Entry / Sales Process Information Flows:
1.Repetitive work routines of the sales order department, the credit department, and the shipping department (Horizontal)
2. Decision needs of those who manage various sales and marketing functions (Vertical)
Order Fulfillment Process: Process of creating value for the customer. Profit maximization while making goods available in a timely manner.
Horizontal Information Flows (9), please describe them:
1.) Customer places order
2.) Sales order department requests credit approval from the credit department.
3.) Credit department informs sales order department of disposition of credit request.
4.) Sales order department acknowledges order to the customer.
5.) Sales order department notifies shipping department of sales order.
6.) Sales order department notifies warehouse and B/AR/CR process of shipment
7.) Warehouse sends completed picking ticket to shipping.
8.) Shipping department informs sales order department of shipment.
9.) Shipping department informs carrier B/AR/CR process, and general ledger process of shipment.
Vertical Information Flows, explain: Decision needs of those who manage various sales and marketing functions.
The vertical information flows (page 353 figure 10.2 in the book depicted by the broken lines) represent information flowing from the Supervisor of the sales order department (at the bottom of the hierarchy) to the manager of advertising, manager of new product development, manager of customer sales and service, manager of marketing intelligence, and manager of sales promotions (all in the middle of the hierarchy) with the VP of marketing atop the hierarchy. In other words, sales-related data is captured in the sales order department and then flows vertically to managers housed within the marketing organizational structure. This information was traditionally based on sales-related events and captured through the use of a sales order form or through the entry of data directly into the database. As organizations become increasingly more customer focused, the information needs for decision making are becoming less accounting entry-oriented and more focused on customer characteristics, needs, and preferences.
Technologies Supporting OE/S Process:
- Data Warehousing: A collection of computerized data that is organized to most optimally support reporting and analysis activity. This can be a massive effort for a company.
- "Store Data and from current and previous years often from both operational and management databases. A major use of data warehouses is in data mining, where the (often a very large amount of very diverse) data is processed to identify trends, patterns, and relationships. Sometimes, a limited scope data warehouse is called a data mart." (Becker)
- Subject Oriented
- Time Variant
- Non-Volatile
- Integrated
Evolution of Data Warehouses-Offline Copies of exisiting databases
- Offline Data Warehouse-update periodically
- Real Time Data Warehouse-updated as events are processed
-Integrated Data Warehouse-generates transactions back to "live" database.
Narratives of the OE/S Process:
- Write narratives for each of the models provided in chapter 10 starting with:
- OE/S Data Stores
-Marketing Data-Customer Master Data
-Sales Order Master Data
-Accounts Receiveable Master Data
- Inventory Master Data
OE/S Process Context Diagram-Customer places an order which goes through the Order entry/ sales process. The customer receives acknowledgement of the sales order. Then the carrier receives completed packing slip and a bill of lading. The billing accounts receivable/ cash receipts (BA/AR/CR) process receives the sales order notification and shipping's billing notification. Then the general ledger inventory sales is updated in the general ledger process.
OE/S Process Level-0 Diagram-
A customer places a sales order with a company. The company validates the sales order by checking inventory, customer, accounts receivable, and sales order master data. Once the computer processes this information, inventory and sales order master data are updated. Any valuable marketing information is also sent to the marketing data store. The sales order is completed by sending sales order notification to the billing/AR/cash receipts process, acknowledging the customer’s order, and sending a picking ticket to the warehouse. After the picking ticket is processed, a completed picking ticket is sent to the shipping department. Inventory and sales order data is retrieved from the master data table and compared with the picking ticket. Once this information is verified, the sales order and inventory master data tables are updated. Notification of the shipment is sent to the billing/AR/cash receipts process and a general ledger inventory sales update occurs. Finally, the bill of lading and packing slip are sent to the carrier to deliver the goods to the customer.
OE/S Process Level-1 (process 1) Diagram-
Customer places order where the availability of requested inventory is verified by consulting the inventory master data. If sufficient level of inventory is on hand to satisfy request, the order is forwarded for further processing. But, if the customer orders goods that are not in stock, a special back order routine will occur. Once the goods are received, the order is routinely processed. If the customer refuses to accept a back order, then the sales event is terminated and the order is rejected. Information from the order that has potential value to marketing would be recorded in the marketing data store.
Once inventory availability is assured, the customer's existence is verified by the customer master data store, and the customer's credit availability for the order is verified from the Accounts receivable master data store. If the customer exceeds their credit limit, their order is rejected (error routine not shown).
Once the order is accepted, simultaneously the following activities occur: the inventory master data updates to allocate the quantity ordered to the sales order, the sales order master data updates to indicate that a completed sales order has been created, and the sales order disseminates (the customer receives acknowledgment of order, sales order notification is sent and picking ticket is sent).
OE/S Process Level-1 (process 2) Diagram-
The warehouse personnel receive a picking ticket, locates the goods, the goods, take the goods off the shelf and match the goods with the picking ticket. If the goods from the shelf are might not be those indicated on the picking ticket, therefore there may be an error routine. If sufficient goods do not exist to satisfy the quantity requested, there will be an error routine. Warehouse personnel writes the quantities "picked" on the picking ticket, to indicate it is completed. And the completed picking ticket is forwarded to the shipping department.
OE/S Process Level-1 (process 3) Diagram-
The shipping department receives the completed picking ticket and data retrieved from the sales order master data table. The shipping clerk matches the quantity of goods, the quantity on the picking ticket, and the quantity stored in the sales order data store. If the details agree, the matched sales order is forwarded to the next process. If the details of data flow do not agree, the order is rejected and the initiates procedures for resolving any discrepancies.
Once the matched sales order is received, it produces and distributes notices of the shipment and updates the sales order and inventory master data tables. The sales order master data is updated to reflect that the goods have been picked, packed, and shipped. The inventory master data is updated to change the quantity allocated for the sales order to an actual shipment, thus reducing the quantity of inventory on hand. The distribution of notices includes the data flow of shipping's billing notification, the bill of lading, a packing slip is attached to the outside of the package and identifies the customer and the contents of the package, and the general ledger inventory sales update to notify the general ledger process that inventory has been sold and the cost of goods sold has increased.
OE/S System Flowchart:
A customer phones an order to the customer service center, where the CSR enters the sales orders into the computer. The system may prompt the CSR to enter the customer number, which retrieves certain standing data from the customer master data. The CSR enters the other data in the sales order guided by the cursor in the preformatted screen. The system automatically displays the description and price of each item ordered and the CSR enters the quantity ordered. After the customer’s credit is checked, the computer updates the enterprise database (sales order and inventory master data) and displays a sales order number, which is read to the customer. A picking ticket containing a bar code of the sales order number is printed in the warehouse. Warehouse personnel then pick the goods, record the quantity picked, and compare the goods to the picking ticket and initial ticket. The completed ticket (with bar codes) is sent to the shipping department, where the shipping personnel scan the bar code to bring the sales order information on the computer screen. They compare the order number and quantities and then accept the shipment. This prompts the computer to update the enterprise database (sales order, inventory, and GL master data), print a packing slip and bill of lading, and display “shipment accepted”. The goods are packed along with the packing slip and bill of lading, and the box is given to the carrier for delivery.
A simplified concept of Horizontal and Vertical Integrations:
Horizontal or "within" information flows. A decision/order may interact with many people on the same level. However, Vertical Information will become less detailed and concentrate more on strategy as it moves up higher within the company. For Example, higher up information may concentrate on how do we improve the speed of fulfilling orders, how do we sell a higher percentage of a particular product, how do we save costs on a paticular material. A more detailed description of Horizontal and Vertical Sales Process taken from the book is mentioned above. This is ment for a simple understanding of Vertical and Horizontal concept within companies.